Yes as Indian Paypal Rules you can't hold or send your Paypal balance to another so you need to add another funding source to send Payment from Paypal to other Paypal. Note: You can't send money from One Indian Paypal to another Indian Paypal account.
It will not help you still Funding your Paypal account from bank account is not available in India. Bank account you need to add to withdrawal money from Paypal. You still need to add credit card to be able to send money.
Bank account details need to verify and withdraw limitation of your PayPal account but if you want to transfer money then you must need to add Credit Card or Debit Card. In India most Debit Card not support by paypal so better to try Credit Card